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V3228-14 1 December 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · consolidación fiscal

Fiscal group not extinguished if subsidiary remains dominant and new entity formed

A foreign credit entity asks whether transferring a share and creating a new entity (NewCo) extinguishes its fiscal group. The DGT responds that the group does not end because the subsidiary retains its dominant status and the new entity is integrated from inception.

The question raised

1) Whether, in the event that the proposed operations were carried out, the Tax Group, of which the Branch in Spain is the dominant entity, will not be extinguished in the 2014 fiscal year, and will be composed of the taxpayer (as the dominant entity of the Tax Group) and NewCo (as a dependent entity).

The DGT's ruling

The branch in Spain maintains its status as the dominant company during the 2014 fiscal year; therefore, the tax group is not extinguished by the transfer of subsidiary A. The entity NewCo, being newly incorporated, is integrated into the tax group from its constitution within the same period. However, entity B will not be part of the group in 2014 because the requirement for maintaining the indirect participation through intermediate companies that are part of the group is not met.

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